Surviving lean times: Part Two


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If you didn’t catch Part 1, the first installment explored ideas for coping with a recession driven by crashing oil prices. Since the first article went to press late last week, readers have expressed an interest in hearing more, so let’s pick up where we left off shall we.

Be a bird dog. This is key. Let’s say you’re a subcontractor, and you see an opportunity on GradeBeam-–not for you per se, but scope befitting a General. Instead of ignoring it, share it with 2 or 3 of your trusted customers. In every instance, whenever I share leads with clients, they’re very grateful. It shows you’re looking out for them. Even if they decide not to bid the opportunity, your efforts build good will either way.  

Break bread. This idea hails from a dynamic young lady who works in business development for a well-known General. She hosts a bi-weekly early morning breakfast for her close circle of business partners—vendors, subs, clients—for the purposes of networking, lead-sharing, and discussing market intelligence.  This could open doors you wouldn’t even imagine.

The value-adder. Think hard about how you can improve your value proposition. Case in point: last year an Alberta road builder won a major, multi-year contract with a large county on the basis of a value adder. In collaboration with a local distributor, the contractor pitched the idea of paving a test section with a Kevlar-enhanced asphalt mix. The Kevlar is expected to substantially increase the longevity of asphalt structures, and so the county was intrigued and impressed with the proposal.  

This roadbuilder played his cards wisely. Aware that said county is known to be open-minded to innovative technologies, he knew his proposal wouldn’t fall on deaf ears. So instead of spinning his wheels with more conservative counties, he strategically pursued a jurisdiction known to be an early adopter.  

Turn lemons into lemonade. I once made a surprise collection call on a slow-paying contractor, dropping by unannounced to pick up a cheque. The invoice was approaching 120 days, and they started ghosting me, so I decided to pay a visit. As luck would have it, the CFO was standing in reception when I stepped in. 

This lady gave me a strained smile, politely asked if I wanted a coffee, and showed me to her office. Once seated, I took note of the surrounding squalor, papers strewn about, as though her filing cabinets had upchucked all their contents. She apologized for not taking my calls. I told her to forget about it. But I needed an explanation.  

This small-time contractor was in dire straits. The CFO was waiting on payment from two customers, meanwhile trying to float other jobs, and I was reasonably certain she was dipping into source deductions to make payroll.

The CRA first, then you, is what she told me. She fully expected me to lose my temper, but instead, I asked whether she was familiar with invoice factoring. She wasn’t, so I explained. The revelation almost brought her to tears, and in the end, this suggestion saved them from ruin. And I eventually got paid. This contractor would later grow into a key account that was savagely loyal to my company.

Lean into suppliers. Are your suppliers generating leads for you? No? Maybe because their website hasn’t been updated in five years, or because there’s no trace of you on their website. How about their sales rep—does he/she make visits to your office to explain the latest and greatest? If not, it’s probably time you have a word with them.

If you’re looking for ideas to build rapport with your suppliers, here’s one: reciprocal marketing campaigns. For instance, when I worked as the general manager of a distribution company, we coordinated a ‘road show’ with several of our key suppliers. The road show consisted of presenters from my company and the suppliers, and together we’d travel from venue to venue giving technical talks. Civil engineers and contractors were invited to these events, during which the presenters dazzled the room with specialized knowledge. Suffice to say, these road shows proved to be highly effective lead generators. 

Hand deliver proposals. Most contractors send proposals by email. And in most cases that’s probably fine. But are your quotes enclosed in a proposal package, or just hastily attached as standalone PDFs? If it’s the latter, I urge you to develop a professional package that includes your company profile, past projects, biography of team members, and value-added services. And when you’re bidding a key project, print out hard copies, have them spiral bound, and plan on personally delivering each and every one.

A professional package and hand delivery won’t help if your bid is 10% high. But it can absolutely tip the balance if your price is within spitting distance of low bidder.

Beware of public projects.  Public works are generally a cutthroat race to zero. They’re time consuming to bid, are almost invariably price-driven, typically impose liquidated damages, and they consume your estimator’s time when he could be bidding more profitable work. Public contracts may be useful gap fillers at times, but instead of dwelling on MERX, why not spend that time scrubbing private tenders for scope expansion or value-add opportunities ? 

For instance, suppose you’re an earthworks contractor bidding a transportation job; did you notice the drawings lacked erosion control measures on the 2:1 slope cuts? Those embankments will require hydroseeding, erosion blankets, or cellular confinement to stabilize the slopes, but the engineer of record didn’t seem to notice.  So why not bring this to someone’s attention (at the strategically opportune time), and roll that scope into your own bid if you can pull it off? 

Chase the brunettes: Remember Russel Crowe in A Beautiful Mind?  In one particular scene, Crowe’s character describes game theory to his friends by relating it to courtship. He explains that blondes are more difficult to court because there’s fewer of them thus the competition is fiercer. But the brunettes, because they’re in higher supply, necessarily means there’s less competition to contend with. It’s sort of a crude metaphor, but you get the point. 

Relating game theory to construction, imagine that Grande Prairie, FSJ, and Kitimat are the blondes. These areas of North Peace are absolutely awash with salespeople aggressively pursuing all the big players—and for good reason. But what about the less travelled locales? Do your BD people blaze right through Fox Creek and Dawson en route to FSJ, or do they venture off the beaten path occasionally? Do they stick to the blacktop or do they throw it into 4×4 to find a purchasing agent camped out in a Chateau ATCO? Granted you’ll be sourcing smaller projects outside the high profile areas, but you’ll be rewarded with high margin sole-sourcing opportunities.

Don’t be shy.  Call up your customers if you’re facing a lull in your schedule. Don’t be shy about telling them you’ve got an opening, and ask if there’s any room in the budget for additional works. Make it a win-win by offering to cut them a deal. As a subcontractor, maybe you call a General to inquire about their backlog. Even if there aren’t any opportunities for your company, there’s an off chance the General can make use of your crews temporarily, hence reducing your monthly burn.

Call 1-877-572-1324 to speak with our 541 Eagleson Wynd, Edmonton T6M 0Y4 team for free

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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About Me

Ben Barfett, Principal and Consultant, has spent his life in the construction sector, specifically heavy civil, enviro, commercial, and energy. Having held senior roles in business development, technical advisory, and regional management, he earned his stripes in the field and in head office. Conscious of the interplay between commercial, legal, and execution aspects of construction, his business insights are informed by expertise in WCB policy and enhanced with disability-specific training.

Blue Collar Consulting

Blue Collar Consulting is a WCB and disability management firm. The company specializes in rapid and affordable disability solutions that advance current claims, contain the cost of future claims, and get injured workers back on their feet.